Processing Refund Checks

Processing Refund Checks

Creating a refund check is a multi-step process.

1. Determine what you are going to refund: unapplied payments, on account credits, or both. Determine the total amount to be refunded. Do you really want to refund the customer if they have open receivables balances or if you have previously written off items?

Use the Account Details form to see the open items for this customer:

Collections à Account Details

Close the Find window.

Query - Enter.

Tab to the Balance Due field and enter "!=0" to see only items with a balance.

Tab to the Customer Name or Number field and enter the appropriate customer information.

Query - Run.

Note the payment numbers and credit memo numbers of the items you wish to refund.

2. Create a debit memo for the total amount to be refunded using the Transactions form:

Transactions à Transactions

Enter as any standard on account credit but enter the following values in the fields that are particularly relevant to this process:

Number

RC (the customer’s reference number).

Type

Refund Check

Source

Refunds (allowing manual numbering)

Amount

Total amount (positive).

Reference

(Optional) An internal reference number.

(Line) Description

(List) Refund Check (note that this should use an
AR/AP clearing account).

Line Amount

Total amount (positive).

Note: Be sure to Complete the debit memo (Special - Complete). Note the number for this debit memo.

3. Offset any open receipts using the Receipts window.

Receipts à Receipts à Applications

Query - Enter.

Enter the number for each receipt you wish to refund.

Query - Run.

Click on the Applications button.

Enter the number of the debit memo you created in Step 2.

Update the applied amount as needed.

Save.

Continue until you have applied all unapplied payments.

4. Offset any on account credits using the Account Details window and Applications window.

Collections - Account Details

Use the Find window.

Enter the number for each credit you wish to offset.

Click on the Find button.

With your cursor on the line of the credit you wish to offset:

- Click on the Applications button.
- Enter the number of the debit memo you created in Step 2.
- Update the applied amount as needed.

Save.

Continue until you have applied all related on-account credits.

5. Notify Accounts Payable regarding the refund:

Note the customer, the amount, and the AR/AP clearing account that you used when you created the debit memo. When Accounts Payable creates the check, they should use the same AR/AP Clearing account.

Related Set-ups

Prior to using this procedure, you need to define the follow set-ups.

Transaction Types

(Setup à Transactions à Transaction Types)

Create a Transaction Type for "Refund Check" (Class = Debit Memo) using the appropriate Receivables Account.

Memo Lines

(Setup à Transactions à Memo Lines)

Create a memo line called "Refund Check" using the appropriate AR/AP clearing account for the Account. Use a batch source that allows manual numbering (e.g., Manual-Other).

Number	RC (the customer’s reference number).
Type	Refund Check
Source	Refunds (allowing manual numbering)
Amount	Total amount (positive).
Reference	(Optional) An internal reference number.
(Line) Description	(List) Refund Check (note that this should use an AR/AP clearing account).
Line Amount	Total amount (positive).